Sudan's rolling war costs $100mn a day

These militia members brazenly record their actions and post the footage on social media, proudly boasting of robbing people of the roofs over their heads. Then come the taunts – a cruel and clear message: you'll never get your homes back because we're here to stay.

Where do they get the audacity, one might ask?

Foot soldiers enlisted by the militia are fuelled by the lies of the militia's political advisor, Youssef Ezzat, who purported to dismantle the state established in 1956.

They also draw inspiration from the slogans of the former member of the Sovereignty Council, Mohamed Hassan Eltaishi, regarding ending historical imbalances within the Sudanese state.

This is in addition to documents presented by the former Minister of Justice, Nasr al-Din Abdul Bari, regarding governance and administrative systems, discussed in conferences with the goal of garnering political backing for the militia.

As part of their efforts to build an alternative narrative, the militia has its own slogans that are tied to the establishment of democracy and the restoration of civilian rule.

Their narrative aims to convince people to reject their own observations and experiences, and instead enter a fictional world where Hemedti and his private army embody the ideals of virtue, justice, and peace.

Economic devastation

The ongoing conflict has inflicted extensive economic devastation on the nation. In addition to direct financial losses stemming from the destruction of infrastructure, including commercial, industrial, and residential buildings, the national economy has caved in on itself.

There was a brief spark of hope that the economy would eventually recover – albeit with some difficulty. But any progress made was undone by the upheaval of 2021, and further destroyed by the outbreak of the war in 2023.

On 25 October 2021, before engaging in a dispute over spoils, the two generals involved orchestrated a coup against the revolutionary Prime Minister, Dr Abdullah Hamdok.

This coup d'état not only toppled the government, but it also blocked the country's efforts to rid itself from decades of debt through the Heavily Indebted Poor Countries (HIPC) debt relief programme.

Before this, the transitional civilian government had embarked on a bold and aggressive reform agenda, to achieve economic stability. It involved unifying the exchange rate and curtailing the budget deficit by eliminating commodity subsidies to mitigate inflation.

The government also implemented a social support program to assist underprivileged families impacted by reforms. Additionally, it intensified its support for agriculture to boost production.

However, austerity measures initially resulted in pushback from the people of Sudan. But their concerns were partially alleviated as the exchange rate stabilised, albeit at a higher level. Public sector salaries also went up, which helped to soften the blow.

Reforms in numbers

Economic reforms and the nation's cooperation with the international community started to yield positive results.

By June 2021, the World Bank and the International Monetary Fund (IMF) executive boards acknowledged that Sudan had implemented crucial measures, qualifying it to receive debt relief assistance under the HIPC initiative. This made Sudan the 38th nation to be approved by the programme, which provided aid to heavily indebted countries.

On 26 March 2021, Sudan successfully cleared its outstanding interest arrears of $1.2bn with the World Bank, with the help of bridge financing that had previously been extended by the United States.

Sudan settled the $413mn it owed to the African Development Bank on 12 May 2021, with bridge financing facilitated by the government of the United Kingdom, along with contributions from Sweden and Ireland.

Sudan also settled its $1.4bn debt to the IMF on 29 June 2021, this time with the support of bridge financing provided by the French government.

Creditors from the Paris Club forgave a generous $14.1bn of Sudan's total debt of $23bn, marking a significant reduction of approximately 60%.

In August 2021, the transitional government (with international assistance) began negotiations to settle its $20bn debt to non-Paris Club creditors.

Economic nosedive

Regrettably, this extensive debt relief process, along with other ongoing economic reforms, came to an abrupt end after the coup in October. The consequences were catastrophic.

The United States suspended a $700mn grant that had been approved by Congress for Sudan at the end of 2020. In addition, the annual supply of 350,000 metric tons of wheat to Sudan, valued at around $125mn, was no more.

Sudan also lost a crucial budget support grant amounting to $500mn from the World Bank.

The country had been anticipating approval of an additional $500mn grant earmarked for projects in the domains of energy, food security, and natural resource management by the end of December 2021. Furthermore, all payments owed for existing World Bank projects in Sudan, totalling $760mn, were frozen.

Sudan experienced yet another setback when it lost a $2bn grant from the International Development Association (IDA), outlined in its operational plan as part of its 2019 financing round.

The grant, originally intended to be transferred to the Sudanese government in February 2022, was reallocated to other countries on the IDA waiting list by June 2022.

Exchange rate woes

The Sudanese government had previously moved to unify the exchange rate, which led to an influx of foreign currency into the official banking system.

Sudanese expats were keen on aiding the transitional government; between February 2021 and October 2021, Sudan received around $1.2bn in net foreign inflows from expatriate transfers.

Based on the most conservative estimates, had the coup not disrupted this progress, annual foreign currency inflows could have potentially reached $2bn. As it is, however, the ill-fated coup cost Sudan and its people nearly $9bn.

These economic repercussions worsened significantly as war broke out between the two generals.

Sudanese citizens, who had been expecting economic reforms, found themselves displaced in their own country and neighbouring states instead.

International relief agencies estimated the necessary aid for Sudanese people during this humanitarian crisis at about $2.6bn. However, only $841mn has been made available so far.

The international fervour and enthusiasm to support Sudan and its people after the success of their peaceful revolution in April 2019 has dwindled amidst this grim war, leaving civilians with a mere third of what they need.

Loss of jobs, delayed salaries

The devastation the generals and their followers have wrought on the country is inexcusable.

The Sudanese pound was swiftly devalued after the war commenced on 15 April. Its true market value now stands at over 830 pounds per US dollar – half of what it was worth prior to the coup.

Economic activity has decreased by 50% since the start of the war. Household incomes have also plummeted drastically, with both urban and rural areas experiencing a 60% drop in income.

The shortage of essential goods and services has led to the growth of the war economy and informal markets, which will become increasingly challenging to regulate in the future, even if the situation were to stabilise.

Over 66% of food companies and factories in the country have ceased operations, while 20% of remaining establishments continue to operate at reduced capacities.

Major private economic institutions such as DAL, Hajjar, and Saleh Abdul Rahman Yakub have put an abrupt stop to their operations, resulting in a spike in unemployment rates, virtually overnight.

Approximately 50.3% of Sudanese workers have lost their jobs. This includes 20.4% of the workers in the agricultural sector, 81.3% of the workers in the industrial sector, and 47.9% of the workers in the services sector.

More than numbers

Estimates indicate that the economic toll of the war in Sudan has reached $10bn. This encompasses general economic losses, lost productivity, and infrastructure damage.

However, it does not include the personal losses experienced by citizens or the damage inflicted upon the banking system. If the war persists until the end of the year, this figure is expected to rise to $15bn.

The Gross Domestic Product (GDP) is projected to decline by 48%, with losses estimated at 21% in the agriculture sector, 70% in industry, and 49% in services.

The impact on the gold mining sector, which comprises 15% to the GDP, is expected to record a significant loss of $2bn this year.

However, widespread corruption and the absence or weakness of the state across many parts of the nation may embolden gold prospectors and warlords (especially Russian companies) to further exploit Sudanese resources, either on their own or under the protection of one of the warring parties.

Continuing to delve into the figures and statistics associated with the ongoing senseless violence in Sudan may only deepen the prevailing despair.

However, to simplify the magnitude of the tragedy, it is sufficient to state that experts estimate the direct and indirect costs of the current Sudanese war hover around $100mn per day.

The political antics pursued by specific individuals, armed with weapons and motivated by self-serving aspirations and ambitions for power, will only exacerbate the turmoil.

The most favourable outcome for the Sudanese people lies in the war ending.

The persistence of the conflict, driven by politics, manipulation and a relentless battle for dominance, is bound to fail. Even if successful, it would only yield sovereignty over a barren wasteland.